Citigroup files complaint against Wachovia, Wells Fargo

NEW YORK — Citigroup Inc. said Monday it has filed a complaint in New York Supreme Court against Wachovia, Wells Fargo and the directors of both companies seeking more than $60 billion in damages for interfering with the bank’s planned takeover of Wachovia’s banking operations.

The complaint, brought on Saturday and filed Monday, seeks more than $20 billion in compensatory damages and more than $40 billion in punitive damages from San Francisco-based Wells Fargo & Co. for tortious interference. Citigroup also seeks relief from Wachovia for what it called its bad-faith breach of the banks’ contract.

Meanwhile, Federal Reserve officials have been in talks with Wells Fargo and Citigroup in the hope of getting the parties to come to some sort of agreement, according to a person with knowledge of the talks. The person spoke on condition of anonymity because of the sensitive nature of the matter.

The Wall Street Journal reported Monday that the discussions could result in the two suitors carving up Wachovia Corp.’s network of 3,346 branches along geographic lines, citing people familiar with the situation.

Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., in response to a question from an audience member at the National Association of Business Economists conference about the fate of Wachovia, said: “I think we will have one (resolution) today” that is in accord with the public interest. She did not elaborate.

Early last week, Citigroup Inc. agreed to buy Wachovia’s banking assets for $2.1 billion in a deal brokered by the FDIC. In a surprising twist of events, Wells Fargo announced Friday that it agreed to acquire Wachovia in a deal worth $15.1 billion at the time, or $14.8 billion based on Wells Fargo’s closing price Friday of $34.56. Wells Fargo’s deal did not require any government support.